BAE Systems has secured a £150m contract with the US Marine Corps. Rachael Gordon, the company's head of corporate media relations, spoke with The Manufacturer about BAE Systems’ US deal and its impact on the company’s UK business.
BAE Systems prevailed in the Marine Corps’ robust competition for the next generation of vehicles to get the Marines from ship to shore to engage in land combat operations.
The ACV provides mobility in all terrains, and blast mitigation protection for all three crew and 13 embarked Marines, along with other improvements over currently fielded systems.
Rachael Gordon, the company’s head of corporate media relations, said to The Manufacturer: “The contract with the US Marine Corps is a US programme.
“The amphibious combat vehicles will be manufactured in York, Pennsylvania, which is part of our Combat Vehicles business. As with all contract wins, there is an overall benefit to the whole group, BAE Systems PLC.”
The BAE Systems team, reportedly, conducted its own extensive risk mitigation testing and evaluation for land mobility, survivability, and swim capabilities that proved its vehicle’s performance prior to delivering the first 16 prototypes to the Marine Corps in 2017.
Over the past 15 months, the company supported the Marine Corps’ rigorous Developmental Testing and Operational Assessment of the vehicles, which performed superbly in water and land operations, payload, and survivability.
Gordon said: “In the US we are seeing a return to growth for our US land vehicles business, following the withdrawals from Afghanistan and Iraq.
“Now, the marine corps and the US army are making significant investments in their fleet of combat vehicles and our challenge is to ensure we can meet the increased demands for production.
“In the US, given the president’s budget proposals for 2019 there is positive momentum and BAE Systems in the US is seeing a demand for production in long term programmes in our Combat Vehicles, Weapons Systems and Electronic Systems businesses.
The impact on the UK business
The £150m contract with the US Marine Corps and the increased demand for production in the US are also to impact the BAE Systems business in Rochester, UK.
The BAE Systems’ business in Rochester is part of the Electronic Systems businesses, which specialises in advanced electronics activities such as electronic warfare, electro-optical sensors, military and commercial digital engine and flight controls, next-generation military communications systems and hybrid electric drive systems. BAE Systems in Rochester forms part of the Electronic Systems business in the US.
Gordon explained: “The business in Rochester expects to benefit from its ability to apply innovative technology solutions that meet defence customers’ changing requirements. That, along with strong programme positions, particularly on F-35 Lightning II and F-15 upgrades, and specific products such as APKWS™, position the business well for the medium term.”
US production volume to double in the next three years
Gordon said that approximately 39% of BAE Systems sales are from the US and production volumes in the Combat Vehicles business, underpinned by Armored Multi-Purpose Vehicle, M109A7 self-propelled howitzers and Bradley upgrade programmes, are expected to more than double in the next three years.
“As BAE Systems is a global company, operating across all domains and with a diverse portfolio, it is quite usual for there to be some programs constrained while others are growing and accelerating according to the prevailing economic climate in various country.
“Overall, we are seeing governments in our major markets continue to prioritise defence and security, and we play a crucial role in delivering their capability requirements.”
Congratulations to the @USMC for acquiring its new Amphibious Combat Vehicle 1.1. We are honored our offering was selected to meet this critical capability. https://t.co/MBa3uE1ynN pic.twitter.com/Xsj2v7RBqM
— BAE Systems, Inc. (@BAESystemsInc) June 19, 2018
Good visibility in the UK with long term programmes
Whereas BAE Systems sees a big ramp up in its US business (29.000 staff) due to the investment in defence, the UK business (34.000 staff) remains steady.
Gordon said, the UK is centred around delivery of long term programmes – such as the Type 26 frigate program, built on the Clyde in Scotland, Dreadnaught and Astute submarines programmes manufactured in Barrow in Cumbria as well as a significant workshare on the F-35 programme in Lancashire.
“In financial terms we have good visibility in the UK centred around our long-term positions in Air and Maritime.”
